Thoughts on Guaranteed NFL Contracts

One of the hot topics in the NFL is always the concept of guaranteed contracts and when it comes to questions I receive it’s near the top after things like what is team X’s cap space or what might player X get on a new contract. I’ve written about it before but I wanted to touch on the topic again and why the fight for guaranteed deals is really a waste.

I think we can all agree that NFL teams want to win. While most teams want to win in an economically reasonable manner, in general, if a player has talent he is going to be employed by the NFL because he is going to help the franchise reach the goal of a title.  If he doesn’t have the talent anymore he is going to have to find a new line of work.  There are certainly situations where a borderline veteran is squeezed for a younger and cheaper player, more often than not that decision has more to do with potential upside than economics- The low cost veteran is usually near the end of his useful football life while his younger counterpart may be worse but could also be a big contributor down the line.

NFL front offices have, for the most part, become far more sophisticated in recent years. Part of that stems from CBA changes that have made managing the salary cap far easier than in the past, but another part is the fact that teams have moved away from the dual GM/Coach role that often saw the coach part of his job get the GM part of his job in trouble. Teams now have a far better understanding of when players are going to slide as they sign the contract rather than witnessing the slide and then wondering how to work around the contract.

Two names I was asked about cutting last night were Dez Bryant and Demaryius Thomas, two of the highest paid receivers in the league. Both players signed contracts in 2015 and were considered the top players at the position. Just a short time later both players are more or less guys on the field. Its not that they don’t have value they simply don’t have $15 million worth of value. Luckily for the teams they have the ability to move on so they don’t compromise their salary cap further.

If either player is cut I’m sure there will be a rash of tweets and articles about how contracts should be guaranteed. Dez’ career is going to be considered derailed by injuries and a QB change while Thomas; is going to be strictly tied to poor QB play. Of course both will find other jobs, but they just won’t pay them as much, and how long they last there will depend on the numbers they put up which will be considered unfair. But does the guaranteed contract solve the issue? Nope it doesn’t.

The first thing to understand is who is and is not performing in the NFL. To do that I used a few baseline metrics to select groups of players. I looked at the top 15 passing yard leaders, top 20 rushing yard leaders, top 30 receiving yard and sack leaders, top 75 tacklers, top 49 interceptions, and 87 passes defensed and looked at the average age as well as the percentage of players at least 28 and 30. Why 28 and 30?  28 is generally the age every player is off a rookie contract and 30 is kind of considered the “death age” in the NFL.

Position Pass yards Run yards Rec. Yards Sacks Tackles Ints PDs
Avg. Age 31.7 25.5 26.6 28 26.2 26.9 25.5
28+ 80.0% 20.0% 43.3% 66.7% 26.7% 18.4% 20.7%
30+ 53.3% 10.0% 10.0% 23.3% 9.1% 36.7% 10.3%

The only successful positions for 28+ players are pass rushers and quarterbacks (if I had an easy to use metric for OL my guess is they are also 28+). There are also some older players in the secondary who have been able to grab some interceptions. But the average player for these positions is basically 27 and less. The 30+ player is nearly non-existent.

Going back to the age of 28 if that is around the age most players get a second contract it means that the second contract is going to run for the most part to the age of 31 or 32.  If the numbers are already so low at 30 and older it more or less means there is about a 10-15% chance that the team would want that player on the team at that age.

We already established that teams want to win and that most are pretty smart. That means that most know that any long term “guaranteed” contracts that they sign are going to significantly compromise the team in the future. So if the league agreed to fully guaranteed deals do you think that teams would do the same contracts that they do now like Dez’ 5 year $70M contract?  They wouldn’t.

Bryant had received $45 million over the first three years of his contract. Dallas’ hope there (or at least it should have been their hope) is that he would give them that value and then still be good enough to be “underpaid” on the backend. The odds are against the backend being worth it for a receiver but there is a chance.

The new contract would discount that possibility more or less turning 5 years and 70 million into something like a fully guaranteed, 5 year $48 million contract or 3 year, $39 million contract. Im not sure the player makes out better in either scenario and more and more players would be taking 1 year contracts to maximize their value. That’s makes free agency more fun and could help certain guys, but its not going to turn the NFL into the NBA or MLB.  You cant hide contracts like the other sports can unless you completely change the system of the cap which is probably not in the best interest of the game.

If there was really a bigger change that would help its probably the ability to sign earlier extensions. Right now teams have to wait until after a players 3rd year (unless they are undrafted) to sign an extension. The most successful teams, in my opinion, are those who are drafting well and rapidly re-signing those players. Its an area more teams could improve. They have their best years under contract and will likely be out of the deals right when the declines are projected to begin. The player benefits too because they are still at a stage in their career where the less sophisticated front offices will likely sign off “name value”.

It’s the best way for the team to maximize their return on investment and manage their roster so they can continuously keep a window open rather than falling into the trap years that still do hit teams where they are forced for one year to stand on the sidelines in the offseason and not be able to tinker with the team. Of course the team still has to make good decisions when they sign the contracts (think Tyron Smith rather than someone like a Tavon Austin) early but they are going to have an advantage over teams that linger on contract decisions and then guarantee 3 years of salary to the player.

But I just don’t see a scenario where making contracts guaranteed somehow is going to change the mix of players in the NFL and increase that average age per position by keeping veterans around longer. Teams will simply adjust to it and it wont be the big money splash that some are thinking.